Feeling Left Out? How to Save For Your First Home
When the Federal Reserve dropped interest rates in 2020, the real estate market became flooded with new buyers looking to take advantage of low rates to lock in a mortgage. While interest rates have increased since that time, a large number of buyers still enter the market on a daily basis. If you're feeling left out and believe that buying a home is right for you, your main goal should be to increase your savings to the point you can afford your first home. Here are some tips on how to save for your first home.
Identify Your Budget
Before you start saving money, you should first identify your budget. Knowing the amount of money you must save may give you the structure you need to set aside a certain amount in savings every month. Determine how much you're able to afford when buying a home, which can be done with a mortgage affordability calculator.
While a down payment of 20% will allow you to avoid private mortgage insurance, it's possible to purchase a home with a down payment of as little as 3-5%. Every lender and lending program has different requirements. You should also take closing costs and moving costs into account when calculating your budget.
Reduce Your Expenses
Once you've set a budget, you can then work on reducing your monthly expenses. Let's say that you currently have three subscriptions to services like Netflix and HBO Max. If you can excise two of these subscriptions, you'll start saving a small amount of money every month. To effectively reduce expenses, list every expense you currently have. Anything you don't need at the moment could be removed from your monthly expenses.
Pay Down Remaining Debt
Along with reducing your expenses, it's also highly recommended that you take steps to pay down any remaining debt you have. While it might seem unwise to spend your money to pay down debt, doing so will improve your credit score, which should help you net a lower mortgage interest rate. It might also allow you to get rid of expenses if you currently pay bills on a monthly basis for some of this debt.
Pick Up a Side Job
In the current economy, getting a side job is easier than it's ever been. Some common side jobs include:
- Freelance work as a musician, writer, artist, or photographer
- Drive for Lyft or Uber
- Test websites and apps for usability issues
- Walk pets
Automate Savings
One way to control your monthly spending is by automating your savings. You can call your bank and ask them to set an automatic withdrawal that goes from your main account to a savings account. If managing your money is sometimes challenging for you, this option can be highly effective.
Saving for your first home might feel like an arduous and impossible task. However, all it requires is for you to take some small yet effective steps to build your savings. Once you've set a budget, you can get started on reducing your expenses, paying down debt, and even picking up a side job.
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Five Secrets to Successful House Flipping
If you're looking to invest in real estate as a house flipper, you have the potential to earn high returns on your investment. However, successfully flipping homes is challenging. When you don't have experience with this type of investment, there's a good chance that you'll make mistakes. Here are five secret skills and tips that should allow you to reduce your mistakes and successfully flip homes.
Be Careful When Completing a Sizable Remodel
Taking on a sizable project can be an appealing opportunity. However, large projects also have more points of failure that could lead to substantial losses. Large remodels invariably take up a considerable amount of resources and time. Your contractors may also become frustrated with working on this type of project. Always be careful with sizable remodels. Try to plan everything out before making the investment to reduce the potential for costly mistakes.
Make Sure You Have Enough Funds
If you need to take out a loan to invest in a home, you'll need around 20-25% of the home's value for the down payment. Costs can add up quickly when repairing and upgrading a home, so make sure you have a contingency fund on hand to handle unexpected costs.
Search for Discounted Properties
While you can certainly find homes to purchase from standard real estate listings, these listings mainly consist of livable homes that are already in good condition. If you want to find discounted properties that can be remodeled and flipped for a decent profit, consider focusing on:
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Local auctions
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Wholesalers
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Foreclosure listings
Contact a Professional When Needed
Many house flippers will attempt to perform renovations and repairs on their own to keep costs down. Doing so, however, may result in you cutting corners. The types of projects that you might be able to perform include replacing existing carpet, installing drywall, painting walls, and removing wallpaper.
If you find that you're taking on a repair or renovation that's too complicated for you, don't hesitate to get in touch with a contractor. This option should be less expensive and time-consuming than attempting the renovations on your own.
Prioritize the Most Important Improvements
It's highly recommended that you prioritize the most important improvements when flipping a home. First, focus on essential repairs. If you miss out on repairing a malfunctioning HVAC system or other appliances, you could lose a sale.
You should also consider performing renovations that match the latest trends, which could involve installing an energy-efficient appliance or outfitting the home with a smart home system. The right changes can add a considerable amount of value to the property.
Flipping a home is never easy. These tips and suggestions should give you the skills you require to turn an old and worn-down property into a beautiful home that earns you high profits.
Mariusz „Mario” Misiewicz
HomeSmart Connect
cell: (773) 412-0517
e-mail: MisiewiczRealty@Gmail.com
on line: www.MisiewiczRealEstate.com